Produce RPCs: An Interview with IFCO’s Fred Heptinstall

Reusable plastic containers (RPCs) are seeing increasing acceptance as an efficient and environmentally responsible approach to transport packaging in the produce supply chain. In fact, IFCO recently won the Responsible Packaging Award at the Natural Products Expo East, in some long overdue recognition for a member of the reusable transport packaging industry.

Fred Heptinstall, President and General Manager of IFCO’s RPC Management Services Division, graciously answers our questions below, with his responses in bold face)

1. In the U.S. , what industries are served by IFCO RPCs?

IFCO primarily services the produce industry for retail. IFCO also has a small presence in the meat and egg categories.

2. How many RPCs does IFCO utilize in the U.S. as well as for its global operations?

IFCO maintains a pool of 210 million RPCs worldwide. Because the crate pool in the USA is continually evolving, we do not report the number of RPC for the USA market.

3. What can you tell us about level of penetration overall of RPCs in the U.S.?

The overall penetration of RPCs in the produce industry for retailers is approximately 10%. Both the growth of RPCs and retailer interest in the RPC system have grown steadily in recent years. Most of the top 25 US retailers are expressing interest in converting to RPCs for part or all of their transport packaging for produce.

4. What are the current selling points that are winning people over in the conversion to RPCs?

Three major value points are driving RPC growth and will continue to be the foundation for growth in the future. The three drivers fueling the growth are:

RPCs provide a lower end to end supply chain cost

RPCs reduce shrink and deliver better quality produce at point of purchase in retail stores. RPCs protect produce better, resulting in less damage in transit. Post-harvest air flows are also improved, resulting in better taste and quality of produce.

RPCs also work very well in automated warehouse systems and are easier to manage in most packing operations.

5. What are the barriers that are holding people back from changing?

Generally, a lack of knowledge about RPCs or just general prejudice against them. Once those knowledge barriers are eliminated or resolved, the path to conversion to RPCs is opened up and most retailers work toward a conversion to RPCs.

6. When deciding to switch from expendable to RPCs, how does the process typically work. Is it normally driven upstream by the retailer?

Generally, the conversion to RPCs is driven by the retailer. They usually decide on the transport packaging they want their vendors to use. However, more and more produce packers/growers have learned the value of using RPCs versus other transport packaging options and are now advocating the retailers to transition to RPCs. IFCO has a large number of produce grower/vendor testimonial videos as evidence of this.

7. If a retailer is requesting a shipper to convert to RPC, what challenges are faced by the shipper, and how long of a time horizon might the shipper require to change.

Generally, the transition to RPCs is a simple process for the grower/shipper. In some situations, grower/shippers need to learn how to effectively pack in RPCs. For all new grower/shipper startups, IFCO provides highly trained and skilled experts to assist in the transition to RPCs. Other than an occasional issue, the transition to RPCs is usually fast and simple.

8. What steps should be taken in transportation, distribution center and retail operations to prepare for conversion to an RPC environment?

Because RPCs are easier to unload, place in warehouse racking, and palletize, the only steps required are implementing more efficient pick patterns and training for the warehouse operators for the first few hours of handling RPCs.

9. Are there any issues around handling of RPC unit loads or in case picking of RPCs that distribution centers that would be different?

This is an area where RPCs really distinguish themselves. RPCs are easier (and less costly) to unload at distribution centers. They are more efficient to place in racking and are more efficient when outbound pallets for delivery to retail stores are assembled. Because they have a common foot print, interlock when stacked and cross-stacked, and are more ergonomically designed, they allow for a more stable and higher stack configuration when delivered to retail stores.

10. What about the experience of returning the empties. How does that work, and how well is it accepted versus in an expendable packaging environment? Is more space or labor required?

RPCs take less space in back rooms at retailer stores, require fewer costly trips to the corrugated bailer, and are easier to handle than corrugated boxes. Recent retail survey results show that over 95% of grocery produce department managers report easier unloading and stocking with RPCs, and not surprisingly, they say they prefer RPCs to corrugated boxes.

11. What is IFCO’s approach to container tracking?

IFCO uses a number of tracking methods for it’s RPCs. The most prevalent tracking is through a systematic outbound/inbound reporting system.

12. Can you provide a quick summary of IFCO’s network of RPC service center capability in the U.S. ?

IFCO operates four strategically located service centers that sanitize it’s RPCs to food grade standards for every use. They are located in Atlanta, San Antonio , Rancho Cucamonga, and Chicago . These four locations service all produce points for North and South America . In addition, IFCO manages 78 locations where RPCs are retrieved and sorted.

13. Internationally, are there different drivers for the business’ growth than in the U.S. ? Are any of the other international markets more promising, and if so, why?

The drivers to convert to RPCs are the same internationally. In general, European countries are far more developed in the use of RPCs than North America, but that gap is narrowing as more and more US retailers realize the value of RPCs in their supply chain.

Comments

Great interview Rick and Fred! It’s great to see the expansion of RPCs both within produce as well as other new and exciting sectors. A number of innovative retailers lead the charge. The rest are realizing that it’s never too late to benefit from the advantages of this well designed supply chain evolution.